LONDON, June 1 (Reuters) - Copper prices gave up some gains on Tuesday in choppy trade as lower physical demand in top consumer China offset upbeat manufacturing activity in major economies and supply concerns.
Benchmark copper on the London Metal Exchange eased 0.2% to $10,252 per tonne by 1616 GMT, after trading higher earlier in the session.
“There is a tug of war between bears and bulls in the copper market,” said Gianclaudio Torlizzi, partner at consultancy T-Commodity.
The record low Yangshan copper premium SMM-CUYP-CN pointed to weak Chinese demand which put pressure on the market but supply issues in Peru and Chile were supporting the market, he said.
Premiums sank to a record low of $30.5 a tonne, indicating weakening demand for imported metal into China. Record copper prices are deterring buyers, analysts said.
“Prices have come too far and risen too fast ... they have decoupled in part of fundamentals as some metals are in oversupply,” said Commerzbank analyst Daniel Briesemann.
China’s measures to cool prices could be the trigger that prices need for a “strongly needed” correction, he said.
Meanwhile, manufacturing in Europe expanded at record pace in May and factory activity in top metals consumer China expanded at the fastest pace in a year due to booming domestic demand.
Copper, mainly used in the power and construction industries, is seen as a sensitive gauge of the health of the global economy.
SUPPLY: A strike by workers for BHP’s Escondida and Spence copper mines in top producer Chile entered its fifth day on Monday.
ELECTION: Supporting the market is June 6 election in major copper producer Peru where a socialist candidate has pledged to take a larger slice of profits from miners.
FOREX: A weaker dollar makes greenback-priced metals cheaper to holders of other currencies.
PRICES: LME aluminium fell 0.4% to $2,473 a tonne, zinc was steady at $3,065, lead rose 0.9% to $2,213.50, tin was down 0.1% to $30,700 while nickel was flat at $18,110. (Reporting by Zandi Shabalala, additional reporting by Mai Nguyen; Editing by Bernadette Baum, Jonathan Oatis and Alison Williams)